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Those who buy Steven Kelman’s new
book looking for a personal account of the acquisition reform
movement of the 1990s will be disappointed. The book is not a
memoir, but a social science treatise. Kelman’s purpose is not
to recount his personal experiences as a reformer, but to
challenge the prescriptions for organizational change offered by
management "gurus" like John P. Kotter, who claim that people
resist change and that leaders must induce change by changing
attitudes and using "shock and awe" tactics.
Using acquisition reform as a test case, Kelman—the
Administrator of the Office of Federal Procurement Policy from
1994 to 1997 and the leader of that era’s acquisition reform
movement—marshals survey data and multiple regression analysis
to show that organizational change is a political process. He
argues that there is a "change vanguard" in every organization
which is discontented with the status quo and that leaders can
use them to recruit others and to form a movement large enough
to overcome organizational inertia and opposition.
Anyone who worked in acquisition during the late 1980s and early
1990s knows that many persons were unhappy with the contracting
process and wanted to change it. During the years 1994 through
1997 the Clinton Administration seized upon their discontent to
initiate reform, the main objective being to streamline the
process of awarding contracts. Amid many alarums and excursions,
and with no small amount of ballyhoo, many changes were made. Of
course, critics now question the merits of some of those
changes, even asserting that they have contributed to the
emergence of a "culture of lawlessness" in contracting.
Kelman from the outset disclaims any intention of determining
"whether reform substantively improved the procurement system."
He is concerned only with the possibilities and processes of
organizational change, and he assumes that acquisition reform
was "successful." I am not competent to judge the social science
in this book, but the idea of a "change vanguard" makes sense to
me. Time will tell if other social scientists find Kelman’s book
to be a useful contribution to the literature of organization.
But as I read it I could not stop thinking about Staughton
Lynd’s famous question: Knowledge for what? And I wanted
to know: Change for what? Change to what effect? Change for how
long?
Kelman says that the objective of reform was to reduce
bureaucracy in the procurement system, and that bureaucracy has
three components: rules, hierarchy, and specialization. Kelman
is especially exercised by the bureaucratic evils brought about
by excessive emphasis on following rules, both formal and
informal. Three "rules" merit special mention by him, and I’ll
quote his statements of them from page 11:
Contractors were not
allowed to speak one-on-one with government officials
while the government was preparing a procurement… In the
bid solicitation, the government was required to specify
precisely what it wanted (so bidders could bid on the same
thing)… The past performance of bidders on earlier
contracts could not be used as an evaluation criterion.
Of course, these were not really
rules at all. Long before reform government officials could and
did meet one-on-one with contractors while they prepared
solicitations; agencies were permitted, and even encouraged, to
use functional and performance specifications in lieu of design
specifications; and agencies did evaluate past performance. What
Kelman calls rules were really practices, and were often based
on ignorance of the rules and/or fear of protests abetted by
excessively conservative lawyers.
Acquisition reform was effected by exhorting contracting
personnel to be brave and to innovate, by relaxing existing
rules and, ironically, by adding new rules. It took a while for
contracting officers to take advantage of some of the reforms,
such as the new rules for buying commercial items and the
relaxation of requirements for submission and certification of
cost or pricing data. Other reforms, like credit cards and
multiple award task order contracts, were quickly seized upon.
Unfortunately, they were often abused, which resulted in yet
more rules. The ultimate effect of other reforms, like the FAR
Part 15 Rewrite, is unclear. Some reforms have become persistent
nuisances, like performance-based contracting. On the whole, the
reforms made it easier to get on contract quickly, but did not
ensure better quality or lower prices, and sometimes worked
against them. By and large they did not have much effect on
contract administration.
Rules, hierarchy, and specialization were not and are not the
main sources of the problems in contracting. Contracting officer
ignorance and incompetence were and are the main problem, and
declaring contracting personnel to be professionals did not make
them so. The rules were never as restrictive or compelling as
people made them out to be. The main problem was not the
existence of rules, but that most contracting office managers
and contracting officers did not know what the rules were, and
still do not, and did not have the professional skills that they
needed—such
as competitive process design, price analysis, negotiation, and
business problem solving—and
still do not. Pressured by reformers to serve customers
(who are always right), unequipped and unprepared to assist
clients (who rely on professionals to decide what to do and
to act on their behalf), forced by personnel reductions to take
over clerical tasks, and demoralized by their reduction in
status to administrative assistants to program personnel, too
many contracting officers traded poor bureaucratic practices for
poor but expeditious practices. Their conduct has called the
legacy of reform into question, forcing Kelman to go on the
defense in his Federal Computer Week column and to call
for less oversight of the contracting process, culminating in
his regrettable "Open Letter to 1102s" of October 20, 2005.
(Victor Laszlo? I guess if you’re an IG it’s like being a member
of the Gestapo. Don’t be surprised if the contracting folks who
read Kelman’s letter rise up to sing La Marseillaise when
you show up for a review.)
There is no question that acquisition reform brought about
needed changes in contracting law, regulation, and policy. The
Federal Acquisition Streamlining Act, the
Clinger-Cohen Act, E-commerce, the emphasis on past
performance, MACs, and GWACs, the re-energized General Services
Administration, etc., were real accomplishments of reform and I
admire Kelman for his role in bringing them about. He was our Lawrence of Arabia (or Che
Guevara, depending on how you look at it). But did those reforms
result in better quality goods and services at better prices? I
would like to think so, and I believe that they did in
some cases, but I do not really know that they did
because no one established benchmarks and tests to determine
whether they did or not. Reforms were proclaimed successful
almost the moment they were announced, based on anecdotal
reports without empirical verification: "[Performance-based
contracting produced an] average 15% price reduction and
comparable increase in agency satisfaction with contractor
performance occurred across all price ranges and types of
services for the contracts surveyed." That claim, made by
the Office of Federal Procurement Policy in its Report on the
Performance-Based Service Contracting Pilot Project, dated
May 1998, was entirely unverified by audit, but skeptics were
simply fuddy-duddies. Since then, another OFPP study, conducted
at the behest of one of Kelman’s successors, Contracting for
the Future: Interagency Task Force on Performance-Based Services
Acquisition, dated July 2003, concluded: "The working group
thinks that the acquisition community should work together to
re-shape the expectation that PBSA will save money… There is
little current data to support monetary savings, and if such
data did exist, it would be extremely difficult to isolate the
exact reasons the savings occurred.”
The acquisition reform of the 1990s was rule and
process-oriented, gimmicky, faddish, publicity-seeking, and
self-congratulatory. It was exciting and fun, and I mostly
enjoyed it. But it was not the kind of reform that we most
desperately need, which would focus on developing and
maintaining a corps of professionally knowledgeable and
competent contracting officers, people who could obtain best
value by awarding well-written contracts expeditiously and
administering them effectively, all the while maintaining their
integrity, earning the respect of program officials and
contractors, and capturing and keeping the public’s confidence
and trust. That kind of reform would have been a lot harder to
accomplish, but would have been immensely more effective and
lasting.
In the very last sentence of the book, Kelman says: "However
procurement looks, it is hard to imagine it will not be
different from how it would have looked had reform never renewed
the system." Interesting point. In the first chapter, Kelman
cites one example of what was wrong with the pre-reform
contracting system:
For many years the
military had used government specifications ("milspecs")
in buying everything from ketchup to chocolate-chip cookie
mix, purchasing from the lowest bidder meeting the
specification. These milspecs—about twenty pages long for
cookie mix, providing detailed instructions on ingredients
and baking requirements—were objects of derision;
knowledge of the finer points of cookie baking was hardly
a core competency of the Defense Department. The
specification told how to make cookies but included no
performance requirement that a cookie so produced would be
one soldiers would want to eat…
Note the use of the past perfect—"had
used." It is ironic that he chose that example, because the
cookie specification, MIL-C-44072, 30 APR 90, w/change, 12 FEB
03, is still used as a component specification for the Meal,
Ready-to-Eat. You can verify that for yourself at
www.dscp.dla.mil/subs/support/specs/pcrs/mre/mrem004.htm. It is
26 pages long now and still does not require the delivery of a
tasty cookie, but the cookie is no longer purchased from the
lowest bidder, so I guess that’s progress. Sic transit
reform.
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